IN RE KRYSL, (Bankr.D.Or. 2004)

ALBERT RADCLIFFE, Chief Judge, Bankruptcy

Plaintiff, as assignee of a claim, brought suit under 11 U.S.C. § 523 and 727 to except a debt from discharge and to deny Debtors' full discharge.

Debtors/Defendants moved to dismiss for lack of standing and also sought to enjoin Plaintiff from acting as a "collection agency" until he had registered under Oregon law.

Plaintiff conceded at hearing that he fell within the general definition of a collection agency under ORS 697.005(1)(a). However, he argued that he was excluded from the definition as one providing "factoring services."

At issue was the interpretation of ORS 697.005(1)(b)(L)(ii) which provides for an exclusion from the definition of "collection agency" for persons engaged in the business of "soliciting or collecting on accounts that have been purchased from commercial clients under an agreement. . . ."

The court examined the text of the statute, prior statutory enactments, and the common law in existence at the time of enactment, and concluded that the exclusion required more than a single agreement to purchase a single account. Rather, the statute contemplated some form of "umbrella" or ongoing relationship between the factor and its client. Plaintiff had conceded that there was no such relationship between him and his assignor. As such, he lacked standing to prosecute the claim. Further, because Plaintiff was not registered, and because Defendants had been injured, (as they had incurred attorney's fees and costs in defending the instant proceeding), Plaintiff was enjoined from acting as a collection agency in the State of Oregon unless and until he registered with the Oregon Department of Consumer and Business Services under ORS 697.031.